Member Sign In

You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate but affiliated companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.

If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.

Mixed Econ Data, Spain Gets Tense

You have chosen to follow this author. You will receive an email notification when this author publishes a new article. Click submit to continue.

You are alredy following the Author

The Author could not be added at this time, please try again later. If problem persists, please contact Zacks Customer support.

Please Login

A decidedly weak set of domestic economic data and concerns about budgetary developments in Spain provide the backdrop for today’s trading action. While market sentiment ahead of the open was on the positive side, it may be hard to sustain the gains given this uncertain news flow.

The trading action of the last few days suggests that Investors are stepping back from these day-to-day developments to get a sense of the big picture. Next week’s economic releases promise to provide useful clues about that big picture, but it will most likely be the coming third quarter earnings season that will provide the definitive directional nudge to this market.

We will find later today how decisive and determined the Spanish authorities are in tackling the country’s fiscal situation in the face of widespread public protests. A credible budget plan coupled with decisive structural reforms will likely be reassuring enough for the Euro-zone authorities to back-stop the country’s finances. Watch for comments from the Euro-zone officials about the details that Spain announces today.

The overall tone of economic releases on the home front was decidedly weak this morning, with the final read on the second quarter GDP and monthly Durable Goods coming in weaker than expected, while the weekly initial Jobless Claims data coming in better than expected. The GDP revision may not carry that much punch as it was the third look on that reading, but the Durable Goods drop is definitely something to worry about as it raises doubts about the outlook for corporate capital spending.

Granted the headline drop pertained primarily to lower aircraft deliveries from Boeing (BA - Analyst Report), but even the ‘core’ measure that strips out the transportation components fell for the third straight month.

What this tells us that even though consumer confidence may be improving lately as shown by the Conference Board and University of Michigan measures, business confidence seems to be waning. Hard to tell whether it reflects the advance effects of the looming ‘Fiscal Cliff’ or something else, but it’s definitely something to keep an eye on. We will get the first look at the third quarter GDP report in about a month, though next week’s data on jobs and the ISM indexes will set the tone for the broader economic discussion.

On the earnings front, we got a better-than-expected report from Discover Financial (DFS). Nike (NKE - Analyst Report) and Research In Motion , the maker of the BlackBerry, will report after the close today.

Top Zacks Features

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

Zacks Research is Reported On:

At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1986 it has nearly tripled the S&P 500 with an average gain of +26% per year. These returns cover a period from 1986-2011 and were examined and attested by Baker Tilly, an independent accounting firm.

Visit performance for information about the performance numbers displayed above.